ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) on Thursday granted provisional licences of virtual liquefied natural gas (LNG) pipelines to two private companies — Daewoo Gas and LNG Easy — for supply of the fuel through bowsers to consumers outside the gas network.

The licences would be valid for one year. These would be first of its kind projects in Pakistan to facilitate the supply of natural gas mainly to off-grid consumers. Ogra said the decision was a step towards gas market liberalisation, promotion of competition in the gas market, promotion of the country’s economic growth and ensure reliable supply of energy to the consumers of natural gas.

‘Provisional Licence’ have been issued on completion of all formalities under the the Ogra Ordinance 2002, LNG Policy 2011 and LNG Rules 2007 to allow for carrying out regulated activities in the LNG business, the regulator said.

LNG Easy Pte Ltd, to be based at Karachi Port, and Daewoo Gas Pvt Ltd, to be located at Gwadar Port, would pursue LNG virtual pipeline project for supply of gas through cryogenic bowsers. At respective ports, the two companies would import LNG cargoes, fill, transport, market and distribute the fuel under the ‘Integrated LNG Project Structure’ as per the LNG Policy 2011.

First-of-its-kind project to facilitate gas supply mainly to off-grid consumers

Daewoo, a registered company in Pakistan, will establish an LNG terminal at Gwadar Port and supply the fuel through cryogenic bowsers to its customers on the concept of virtual pipelines. It is a wholly-owned subsidiary of Daewoo Pakistan Express Bus Service Ltd.

For setting up of the terminal, Daewoo would use a dedicated berth for LNG at Gwadar Port and build a land-based LNG handling platform, for transferring LNG containers for distribution onwards, building warehousing capacity, and staging area for trucks. Chartered LNG vessels on a voyage charter basis will be used. The project will have the ability to receive up to two vessels a week at berth for which Floating Storage Unit shall be deployed at Gwadar Port. Land based manifold system for quick deployment at Gwadar Port and equipment will be provided by Furui SE (a Chinese technology company). LNG containers on trucks will allow transportation to remote sites where no pipelines are available. The trucks will also be converted to use LNG for lower transportation costs.

Daewoo said that Pakistan has an excellent basis for virtual pipeline with an extensive highway system been built over the last six years. The company noted that Pakistan also has world’s most extensive network of CNG-filling stations built over twenty years ago. The company is reported to have identified potential customers consisting of natural gas consumers.

Likewise, the major shareholding of LNG Easy is held by LNG Easy Pte Ltd of Singapore which has experience in break bulking of LNG into ISO containers and cryogenic bowsers for further distribution to customers.

The company plans to use berth No 18 to 20 at Karachi Port Trust (KPT) for import of LNG cargoes and then use a Mobile Filling Platform (MFP) to fill ISO containers/cryogenic bowsers for further distribution.

The company has committed that initially about 350,000 tonnes per annum of LNG cargoes (approximately two vessels of 30,000 cubic metres per month, 51 bowsers of 18 tonnes each per day) will be unloaded/loaded/filled at Karachi Port. For handling 350,000 tonnes per annum of LNG cargo, the designated berth will be occupied only for up to a maximum of 12 days in a month.

Published in Dawn, January 15th, 2021